UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-02631

Chestnut Street Exchange Fund
(Exact name of registrant as specified in charter)

400 Bellevue Parkway
Wilmington, DE 19809
(Address of principal executive offices) (Zip code)

Edward J. Roach
Chestnut Street Exchange Fund
400 Bellevue Parkway
Wilmington, DE 19809
(Name and address of agent for service)

registrant's telephone number, including area code: (302) 792-2555

Date of fiscal year end: December 31

Date of reporting period: December 31, 2005

Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. Section 3507.

ITEM 1. REPORTS TO STOCKHOLDERS.

The Report to Shareholders is attached herewith.

CHESTNUT STREET EXCHANGE FUND

(A CALIFORNIA LIMITED PARTNERSHIP)

Robert R. Fortune
Chairman

February 2, 2006
Fellow Partner:

Enclosed is the Annual Report of Chestnut Street Exchange Fund for the year
ended December 31, 2005.

Our Fund earned $6.19 per share of net investment income for a share
outstanding throughout 2005, compared to $5.65 per share earned in 2004. The
various increases in dividends paid by portfolio securities plus an increase in
interest income and a reduction in expenses distributed over a smaller number of
shares outstanding accounts for the increase in per share earnings in 2005.

After providing for the January 2006 distribution, the net asset value per
partnership share at December 31, 2005 was $337.28. The net asset value at
September 30, 2005, the date of our last report, was $328.84.

During the fourth quarter of 2005, 85,100 shares of Proctor & Gamble Co.
were purchased and 22,266 shares of Ameriprise Financial, Inc. were distributed
by American Express Co.

Additional information required by the Securities and Exchange Commission
regulations is enclosed.

Data on the equity markets, on certain holdings and on the performance of
our Fund since inception, including comparisons to leading stock market indices
appear in the accompanying Investment Adviser's Report.

Your comments or questions concerning Chestnut Street Exchange Fund are
welcomed.

Yours sincerely,

-s- Robert R. Fortune

Robert R. Fortune

INVESTMENT ADVISER'S REPORT

U.S. EQUITY MARKET REVIEW

As investors reflect on the equity markets in 2005, they look back upon the
year with mixed emotions. Returns were positive for the full year as the S&P 500
Index rose 4.91%, the large-cap Russell 1000 Index increased 6.27%, and the
small-cap Russell 2000 Index was up 4.55%. The market's performance was modest
by the historical standard of an average annual return of approximately 10% for
stocks, but these gains were also achieved in the face of many major challenges:
the Federal Reserve raising interest rates to 4.25%, soaring energy prices,
terrorism and the Iraq war, and the devastating hurricanes. Despite these
burdens, the resilient American economy continued its growth, supported by
favorable consumer spending. Consequently, profit growth remained surprisingly
strong throughout the year, which helped to buoy stocks.

During the fourth quarter, all major stock indices rose with the S&P 500
Index gaining 2.09%, the Russell 1000 Index up 2.12%, and the Russell 2000 Index
rising 1.13%. After suffering through a wave of selling in October, US equity
markets bounced back in November and leveled off in December to post modest
gains for the fourth quarter. While large caps outperformed small caps for the
quarter, they also outperformed for the full year, marking the first time since
1998 that the Russell 2000 has underperformed the S&P 500. Growth dominated for
the quarter as the Russell 1000 Growth Index was up 2.98% compared to the
Russell 1000 Value Index at 1.27%, and the Russell 2000 Growth Index returned
1.61% compared to the Russell 2000 Value Index at 0.66%. Nonetheless, value
outperformed growth for the sixth consecutive year despite the recent rally in
growth stocks.

At the sector level, energy was the top performer for the year despite
sharp profit-taking in the fourth quarter as the energy crisis created by the
hurricanes started to subside in October. Oil prices peaked at $70/barrel before
falling to the mid-$50/barrel range by year-end. The related Utilities sector
similarly outperformed strongly for the year and underperformed during the
quarter. Financials rebounded in the fourth quarter to post solid gains for the
year. The nomination of Dr. Ben Bernanke to replace Dr. Alan Greenspan as the
Chairman of the Federal Reserve relieved investors that the focus on fighting
inflation will remain a top priority. Investors were also starting to conjecture
that the Fed might stop raising short-term interest rates given the economy's
growth prospects. Healthcare performed on a fairly steady basis for both the
quarter and the year. This diverse sector will continue to benefit from the
aging demographics of the "baby boom", innovation in products and services, and
a seemingly unwavering march of higher costs/prices.

Consumer stocks lagged the broader market for both the fourth quarter and
the full year. Investors were concerned that consumer spending might deteriorate
from slowing housing demand, high gasoline prices, and rising interest rates,
among a myriad of other issues. Despite these headwinds, GDP growth continued at
a steady 3.5% annualized rate. Telecommunications and Industrials were volatile
and generally underperformed while the Materials sector produced some winners.
Finally, the Technology sector was also sluggish during the year, with some
notable exceptions particularly in the internet-related industries.
Interestingly, earnings expectations for many technology companies are
rebounding from their post-"bubble" lows reached in 2000 so that stock
valuations continue to look reasonable relative to their 2006 growth prospects.

Much of what has concerned investors in 2005 will remain unresolved going
into 2006. From the strength of the housing market to the direction of energy
prices, these lingering uncertainties have left the equity markets without a
strongly positive or negative direction. In this market environment, we

INVESTMENT ADVISER'S REPORT (CONTINUED)

continue to remain cautious of the consumer's ability to maintain current
spending levels. Additionally, we believe that 2006 could bring a welcomed
increase in information technology spending patterns and prove to be another
year in which energy stocks outperform the broader market.

PORTFOLIO REVIEW

For the fourth quarter of 2005, the Chestnut Street Exchange Fund returned
3.30% compared to 2.09% for the U.S. equity market benchmark S&P 500 Index. The
strong performance in the quarter helped to offset some of the underperformance
experienced earlier in the year. The Fund finished the year with a return of
3.12% compared to a 4.91% return for the S&P 500 Index.

During the fourth quarter, the U.S. stock market began to behave in a way
that was more beneficial to the Fund with larger cap stocks with strong equity
oriented balance sheets outperforming. As we have discussed in prior reports,
the Fund is positioned in larger companies that we believe are generally
conservatively managed to assure financial health in adverse environments. For
several years now, these types of stocks have underperformed as investors
flocked into smaller cap names reflecting the view that global economies were
strong and that the risk premium was compressed. In the fourth quarter, we began
to see the emergence of larger cap companies like those the Fund invests in.

There were several specific factors that drove outperformance in the
quarter. For much of the year, the energy sector significantly outperformed the
rest of the equity market as global demand far outstripped current refining
capacity. The impact of Hurricane Katrina on U.S. refining capacity exacerbated
the situation and drove energy prices and the sector, skyward. Energy stocks
retreated somewhat in the quarter so the Fund's underexposure to this sector
helped on a relative basis. Longer term, we believe that global demand will
outpace the ability to increase supply so we are positive on the sector. That
being said, the dramatic run-up in the stocks and the likelihood of a volatile
period of consolidation lead us to believe that there will likely be a more
opportune time than the present to add to holdings in the sector.

We have been attempting to reduce the Fund's positions in Johnson & Johnson
and Intel throughout the year and we continued on that track in the fourth
quarter. As of the end of the year, the J&J position stood at 12.0% while Intel
accounted for 10.8% of the Fund's net asset value. These stocks continue to have
an outsized impact on Fund returns, but they have been meaningfully reduced. We
continue to believe that both companies are well managed and financially sound
but each faces a more difficult environment going forward. J&J has been
fortunate to grow its earnings at roughly 15% annually over the five years ended
December 2004, but earnings growth declined to approximately 13% in 2005. We
believe the company's aggressive pursuit of Guidant is indicative of its own
recognition that the current product portfolio will have a difficult time
generating growth in excess of 15%. For Intel, we continue to believe that the
company and its industry have matured into a more cyclical growth pattern. With
increasing competition from AMD, we believe that we should take the opportunity
to trim the stock from time to time. For the quarter, J&J declined 5.0% making
it the largest detractor from performance in the period. Intel rose 1.3% and had
little impact on returns for the period.

On the positive side, several stocks performed exceptionally well and
helped contribute to the Fund's outperformance for the quarter. In particular,
Bank of America and Wells Fargo rose 9.6% and 7.3%, respectively. The bank
stocks rose in line with the industry as fears of further increases in short
term rates abated. Merck also continued its recovery as fears over the financial
impact of Vioxx

INVESTMENT ADVISER'S REPORT (CONTINUED)

litigation fell following Merck's victory in a trial in New Jersey in November.
The case in Florida resulted in a mistrial in December. Meanwhile, the company
appears to be on the road to some earnings growth recovery as fourth quarter
earnings are estimated to be up more than 20% above the final quarter of 2004.

For the year, the Fund's underperformance was primarily the result of the
underweight in the energy sector and poor selection in the healthcare sector. In
healthcare, J&J declined 3.4% for the year, making it the largest detractor from
performance for the Fund, while Abbott Labs declined 13.5% making it the second
largest contributor to the underperformance. Abbott performed generally in line
with the drug group, which performed poorly, for much of the year, but a study
was released in the fourth quarter that indicated that the company's new drug
for heart failure, Simdax, failed to prolong life more significantly than other
treatments, sending the stock lower.

There were several stocks in the portfolio that had stellar returns for the
year. Burlington Northern rose more than 51% as earnings accelerated due to
increased pricing power; Moody's performed spectacularly rising 42.0%; and
Schlumberger rose 46.6% as part of the overall appreciation of the oil services
industry.

Portfolio activity in the fourth quarter was generally limited. We used
shares of Intel and Johnson & Johnson to meet redemption requests in-kind in an
effort to reduce the impact these stocks will have on portfolio returns. The
Fund added two new positions in the quarter. We established a position in
Proctor & Gamble, which is expected to grow earnings approximately 15% in fiscal
2007. We believe the growth may be even higher than expectations due to
significant cost savings that could be realized as part of the Gillette
acquisition. The Fund also received a distribution of Ameriprise Financial from
American Express. Ameriprise represents the former financial planning and
services arm of American Express.

INVESTMENT ADVISER'S REPORT (CONCLUDED)

PERFORMANCE COMPARISON

COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN CHESTNUT STREET
EXCHANGE FUND(1) VS. S&P 500 INDEX AND DOW JONES INDUSTRIAL AVERAGE INDEX(2)

(PERFORMANCE GRAPH)

The performance data represent past performance and should not be
considered indicative of future performance which will fluctuate with changes in
market conditions. These performance fluctuations will cause an investor's
shares, when redeemed, to be worth more or less than their original cost.

In addition, the data does not reflect the deduction of taxes that a
shareholder would pay on distributions or redemption of Fund Shares.

FOR THE PERIOD ENDED DECEMBER 31, 2005

<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS
-----------------------------------------------------------
SINCE
3 MONTH 1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION(3)
------- ------ ------ ------ ------- ------------

Chestnut Street Exchange Fund......... 3.30% 3.12% 10.33% 0.09% 7.22% 12.35%
S&P 500 Index......................... 2.09% 4.91% 14.39% 0.54% 9.07% 12.37%
Dow Jones Industrial Average Index.... 2.07% 1.74% 11.18% 2.01% 9.77% 12.41%
</Table>

- ---------------

(1) The chart assumes a hypothetical $10,000 initial investment in the Fund made
on January 1, 1996 and reflects Fund expenses. Investors should note that
the Fund is an aggressively managed fund while the indices are unmanaged, do
not incur expenses and are not available for investment.

(2) Results of index performance are presented for general comparative purposes.

(3) Cumulative since inception total returns were 2,862.11%, 2,842.75% and
2,872.62% for the Chestnut Street Exchange Fund, the S&P 500 Index and the
Dow Jones Industrial Average Index, respectively for the period December 29,
1976 (inception) to December 31, 2005.

February 2, 2006 BLACKROCK INVESTMENT MANAGEMENT CORP.
5

FUND EXPENSES

As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, and (2) ongoing costs, including management fees; and other expenses.
These examples are intended to help you understand your ongoing costs (in
dollars) of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the
beginning of the period and held for the entire six months ended December 31,
2005.

ACTUAL EXPENSES

The first line of the accompanying table below provides information about
actual account values and actual expenses. You may use the information in this
line, together with the amount you invested, to estimate the expense that you
paid over the period. Simply divide your account value by $1,000 (for example,
an $8,600 account value divided by $1,000 = 8.6), then multiply the result by
the number in the first line under the heading entitled "Expenses Paid During
Period" to estimate the expenses you paid on your account during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second line of the accompanying table provides information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed rate of return of 5% per year before expenses,
which is not your Fund's actual return. The hypothetical account values and
expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in the Fund and other funds. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of other funds.

Please note that the expenses shown in the accompanying table are meant to
highlight your ongoing costs only and do not reflect any transactional costs.
Therefore, the second line of the accompanying table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds.

CHESTNUT STREET EXCHANGE FUND

<Table>
<Caption>
EXPENSES PAID
BEGINNING ENDING DURING SIX
ACCOUNT VALUE ACCOUNT VALUE MONTHS ENDING
JULY 1, 2005 DECEMBER 31, 2005 DECEMBER 31, 2005*
------------- ----------------- ------------------

Actual................................. $1,000.00 $1,029.40 $2.19
Hypothetical+ (5% return before
expenses)............................ $1,000.00 $1,022.91 $2.18
</Table>

- ---------------

* Expenses are calculated using the Fund's annualized expense ratio, which
represents the ongoing expenses as a percentage of net assets for the six
months ended 12/31/05. Expenses are calculated by multiplying the annualized
expense ratio by the average account value for such period; then multiplying
the result by the number of days in the most recent fiscal half year; and then
dividing that result by the number of days in the fiscal year. The expense
ratio for the most recent fiscal half year may differ from the expense ratio
based on one-year data in the Financial Highlights. The annualized expense
ratio for the period was 0.43%.

+ Hypothetical expenses are based on the Fund's actual annualized expense ratios
and an assumed rate of return of 5% per year before expenses.

PORTFOLIO HOLDINGS SUMMARY TABLE

<Table>
<Caption>
% OF NET
SECURITY TYPE/INDUSTRY ASSETS VALUE
- ----------------------------- -------- ------------

COMMON STOCK:
Basics..................... 3.8% $ 10,277,793
Capital Equipment.......... 7.8% 21,178,707
Consumer Cyclicals......... 8.0% 21,780,354
Energy..................... 6.1% 16,531,550
Financial.................. 25.3% 68,624,551
Healthcare................. 22.5% 61,009,241
Retail..................... 0.4% 1,054,242
Staples.................... 3.6% 9,810,657
Technology................. 16.4% 44,504,744
Transportation............. 4.1% 11,096,269
Utilities.................. 1.6% 4,332,160
SHORT-TERM INVESTMENTS....... 1.0% 2,799,494

LIABILITIES IN EXCESS OF
OTHER ASSETS............... -0.6% (1,609,995)
----- ------------
Net Assets................. 100.0% $271,389,767
===== ============
</Table>

CHESTNUT STREET EXCHANGE FUND

(A CALIFORNIA LIMITED PARTNERSHIP)

STATEMENT OF NET ASSETS

DECEMBER 31, 2005

<Table>
<Caption>
SHARES VALUE
- ---------- ------------

COMMON STOCKS--99.6%
BASICS--3.8%
100,609 Air Products & Chemicals, Inc. .... $ 5,955,047
86,032 Cabot Corp. ....................... 3,079,946
42,373* Cabot Microelectronics Corp. ...... 1,242,800
------------
10,277,793
------------
CAPITAL EQUIPMENT--7.8%
90,556 Emerson Electric Co. .............. 6,764,533
364,049 General Electric Co. .............. 12,759,917
39,154 Pitney Bowes, Inc. ................ 1,654,257
------------
21,178,707
------------
CONSUMER CYCLICALS--8.0%
99,829* Comcast Corp., Class A............. 2,591,561
129,129 Disney (Walt) Co. ................. 3,095,222
85,100 Proctor & Gamble Co. .............. 4,925,588
144,103 3M Co. ............................ 11,167,983
------------
21,780,354
------------
ENERGY--6.1%
41,979 BP plc ADR......................... 2,695,891
147,227 Exxon Mobil Corp. ................. 8,269,741
57,292 Schlumberger, Ltd. ................ 5,565,918
------------
16,531,550
------------
FINANCIAL--25.3%
111,332 American Express Co. .............. 5,729,145
22,266 Ameriprise Financial, Inc. ........ 912,906
28,441 American International Group,
Inc. ............................ 1,940,529
394,928 Bank of America Corp. ............. 18,225,927
66,363 Fannie Mae......................... 3,239,178
110,307 Marsh & McLennan Companies,
Inc. ............................ 3,503,350
96,032 Moody's Corp. ..................... 5,898,285
140,310 J.P. Morgan Chase & Co. ........... 5,568,904
92,150 Wachovia Corp. .................... 4,871,049
298,190 Wells Fargo & Co. ................. 18,735,278
------------
68,624,551
------------
</Table>

<Table>
<Caption>
SHARES VALUE
- ---------- ------------

HEALTHCARE--22.5%
231,254 Abbott Laboratories, Inc. ......... $ 9,118,345
64,986 Baxter International, Inc. ........ 2,446,723
23,125* Hospira, Inc. ..................... 989,288
75,385 IMS Health, Inc. .................. 1,878,594
547,401 Johnson & Johnson, Inc. ........... 32,898,800
45,931* Medco Health Solutions, Inc. ...... 2,562,950
349,404 Merck & Company, Inc. ............. 11,114,541
------------
61,009,241
------------
RETAIL--0.4%
44,558 Safeway, Inc. ..................... 1,054,242
------------
STAPLES--3.6%
222,044 Coca Cola (The) Co. ............... 8,950,594
45,506 Sara Lee Corp. .................... 860,063
------------
9,810,657
------------
TECHNOLOGY--16.4%
30,192* Freescale Semiconductor, Inc.,
Class B.......................... 759,933
57,923 Hewlett-Packard Co. ............... 1,658,335
39,708 International Business Machines
Corp. ........................... 3,263,998
1,161,599 Intel Corp. ....................... 28,993,511
139,643 Microsoft Corp. ................... 3,651,664
273,453 Motorola, Inc. .................... 6,177,303
------------
44,504,744
------------
TRANSPORTATION--4.1%
113,572 Burlington Northern Santa Fe
Corp. ........................... 8,043,169
37,922 Union Pacific Corp. ............... 3,053,100
------------
11,096,269
------------
UTILITIES--1.6%
143,830 Verizon Communications, Inc. ...... 4,332,160
------------
Total Common Stocks
(Cost: $40,034,994).......... 270,200,268
------------
</Table>

See Accompanying Notes to Financial Statements.
8

STATEMENT OF NET ASSETS (CONCLUDED)
<Table>
<Caption>
PAR VALUE
- ---------- ------------

SHORT-TERM OBLIGATIONS--1.0%
$2,800,000 Federal Home Loan Mortgage Corp.
01/03/06, 3.25%
(Cost: $2,799,494)............... $ 2,799,494
------------
</Table>

<Table>

TOTAL INVESTMENT IN SECURITIES
(Cost: $42,834,488)............ 100.6% 272,999,762
Other assets in excess of other
liabilities.................... 0.1% 442,113
Distributions payable............ (0.7%) (1,963,381)
Payable to:
Investment Advisors (Note C)... (0.0%) (79,108)
Custodian (Note C)............. (0.0%) (6,103)
Transfer Agent (Note C)........ (0.0%) (3,516)
------------
NET ASSETS (Applicable to 804,650
partnership shares outstanding).100.0% $271,389,767
===== ============
NET ASSET VALUE PER SHARE........ $ 337.28
============
NET ASSETS APPLICABLE TO SHARES
OWNED BY:
Limited partners
(800,017 shares)............... $269,827,164
Managing general partners
(4,633 shares)................. 1,562,603
------------
Total net assets
(804,650 shares)............... $271,389,767
============
</Table>

- ---------------
* Non-Income Producing

ADR-American Depository Receipt

See Accompanying Notes to Financial Statements.
9

CHESTNUT STREET EXCHANGE FUND

(A CALIFORNIA LIMITED PARTNERSHIP)

STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2005

<Table>

INVESTMENT INCOME
Dividends.............................. $ 6,127,498
Interest............................... 139,341
------------
Total investment income.......... 6,266,839
------------
Expenses
Investment advisory fee................ 934,843
Managing general partners' compensation
and officer's salary................. 96,071
Legal.................................. 62,000
Custodian.............................. 26,289
Printing............................... 17,229
Audit.................................. 21,000
Transfer agent......................... 16,635
Miscellaneous.......................... 8,495
Insurance.............................. 12,789
------------
Total expenses..................... 1,195,351
------------
Net investment income............ 5,071,488
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain on sale of investment
securities (for federal tax purposes
net gain is $928,780)................ 928,780
Realized gain from security
transactions: distributed upon
redemption of partnership shares..... 28,437,435
Unrealized appreciation of investments:
Beginning of year...... $256,139,300
End of year............ 230,165,274
------------
Net change in unrealized
appreciation................... (25,974,026)
------------
Net realized and unrealized gain
on investments................. 3,392,189
------------
Net increase in net assets resulting
from operations.................... $ 8,463,677
============
</Table>

STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31,

<Table>
<Caption>
2005 2004
------------ ------------

INCREASE/(DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income.. $ 5,071,488 $ 5,097,677
Net realized gain
(loss) from security
transactions, for
federal income tax
purposes net gain
(loss) is $928,780
and ($221,201)....... 928,780 (221,201)
Excess of market value
over book value of
securities
distributed upon
redemption of
partnership shares... 28,437,435 6,669,877
Decrease in unrealized
appreciation of
investments.......... (25,974,026) (1,345,071)
------------ ------------
Increase in net assets
resulting from
operations........... 8,463,677 10,201,282
------------ ------------
DISTRIBUTIONS TO PARTNERS
FROM:
Net investment
income............... (5,069,859) (5,103,069)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net asset value of
1,500 and 1,337
shares issued in lieu
of cash
distributions........ 494,407 429,848
Cost of 91,748 and
21,496 shares
repurchased.......... (30,657,931) (6,952,068)
------------ ------------
Decrease in net assets
from capital share
transactions......... (30,163,524) (6,522,220)
------------ ------------
Total decrease in net
assets............... (26,769,706) (1,424,007)
NET ASSETS:
Beginning of year...... 298,159,473 299,583,480
------------ ------------
End of year*........... $271,389,767 $298,159,473
============ ============
</Table>

- ---------------

* Includes undistributed net investment income of $7,837 and $6,208,
respectively.

See Accompanying Notes to Financial Statements.
10

CHESTNUT STREET EXCHANGE FUND

(A CALIFORNIA LIMITED PARTNERSHIP)

FINANCIAL HIGHLIGHTS

(FOR A SHARE OF THE FUND OUTSTANDING THROUGHOUT EACH YEAR)

<Table>
<Caption>
YEARS ENDED DECEMBER 31,
----------------------------------------------------
2005 2004 2003 2002 2001
-------- -------- -------- -------- --------

Net Asset Value, Beginning of Year....... $ 333.18 $ 327.39 $ 264.29 $ 340.39 $ 362.68
-------- -------- -------- -------- --------
Income From Investment Operations:
Net investment income.................. 6.19 5.65 4.61 3.99 3.79
Net gain (loss) on securities (both
realized and unrealized)............. 4.10 5.80 63.09 (76.09) (22.30)
-------- -------- -------- -------- --------
Total from investment
operations...................... 10.29 11.45 67.70 (72.10) (18.51)
-------- -------- -------- -------- --------
Less Distributions:
From net investment income............. (6.19) (5.66) (4.60) (4.00) (3.78)
From realized gains.................... 0.00 0.00 0.00 0.00 0.00
-------- -------- -------- -------- --------
Total distributions............... (6.19) (5.66) (4.60) (4.00) (3.78)
-------- -------- -------- -------- --------
Net Asset Value, End of Year............. $ 337.28 $ 333.18 $ 327.39 $ 264.29 $ 340.39
======== ======== ======== ======== ========
Total Return............................. 3.12% 3.56% 25.78% (21.25)% (5.05)%
======== ======== ======== ======== ========
Ratios/Supplemental Data:
Net Assets, End of Year (000's)........ $271,390 $298,159 $299,583 $267,987 $360,055
Ratios to average net assets:
Operating expenses................... 0.43% 0.42% 0.43% 0.41% 0.39%
Net investment income................ 1.82% 1.75% 1.57% 1.31% 1.12%
Portfolio Turnover Rate................ 0.82% 0.47% 1.18% 0.98% 0.00%
</Table>

See Accompanying Notes to Financial Statements.
11

NOTES TO FINANCIAL STATEMENTS

(A) ORGANIZATION

Chestnut Street Exchange Fund (the "Fund"), a California Limited
Partnership, is registered under the Investment Company Act of 1940, as
amended, as a diversified open-end management company. The Fund's
investment objective is to seek long-term growth of capital and,
secondarily, current income. Effective January 1, 1998, the Fund changed
its status for tax purposes from a partnership to a regulated investment
company. The change resulted from the enactment of the "Publicly Traded
Partnership" rules to the Internal Revenue Code in 1987, which first
applied to the Fund after 1997.

(B) SIGNIFICANT ACCOUNTING PRINCIPLES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. The following is
a summary of significant accounting policies followed by the Fund in the
preparation of its financial statements.

SECURITY VALUATIONS

Securities listed or traded on an exchange are valued generally at the
last sales price as of the close of the customary trading session on the
exchange where the security is principally traded, or lacking any sales
on a particular day, valued at the closing bid price on that day. Each
security reported on the NASDAQ Stock Market, Inc. is valued at the
NASDAQ Official Close Price. Securities for which market quotations are
not readily available or are believed to be unreliable are valued at
fair value as determined in good faith using methods approved by the
Managing General Partners. Short-term obligations having 60 days or less
to maturity are valued at amortized cost which approximates market
value.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME

Securities transactions are accounted for on a trade date basis.
Realized gains and losses on sales and redemptions in kind are computed
on the basis of specific identification for both financial reporting and
income tax purposes. For securities exchanged into the Fund at the
Fund's inception in 1976, the cost for financial reporting purposes is
the value of those securities as used in the Exchange. The cost, for
income tax purposes, of securities exchanged into the Fund is the tax
basis of the individual investor. Interest income is recorded on the
accrual basis. Dividend income is recorded on the ex-dividend date.

DISTRIBUTIONS

Distributions from net investment income are paid quarterly and recorded
on the ex-dividend date. Distributions of capital gains, if any, are
paid annually and recorded on the ex-dividend date.

FEDERAL INCOME TAXES

The Fund intends to comply with the requirements of the Internal Revenue
Code necessary to qualify as a regulated investment company and, as
such, will not be subject to federal income taxes on otherwise taxable
income which is distributed to shareholders. The Fund may elect not to
distribute long-term capital gains to shareholders, but retain these
gains and pay the income tax at the applicable corporate income tax
rate. If the Fund elects to pay the tax on long-term capital gains, on
the last day of the year the tax is paid, the partners are entitled to a
proportionate credit for the tax payment and the tax basis of their
shares is increased by the amount of undistributed gains less the tax
paid by the Fund. At December 31, 2005, the Fund had a capital loss
carryforward of $5,286,081, of which $1,359,480 expires December 31,
2010, $3,705,400 expires December 31, 2011 and $221,201 expires December
31, 2012. Therefore, no provision for federal income taxes is recorded
in the financial statements.

PNC Bank and BlackRock Institutional Management Corporation ("BIMC"), a
majority-owned subsidiary of PNC Bank, are co-investment advisers to the
Fund pursuant to an Advisory Agreement dated January 1, 1998. In June 1998,
PNC Bank and BIMC restructured their operations and BlackRock Financial
Management, Inc. ("BFM"), a majority-owned subsidiary of PNC Bank, assumed
the rights and obligations of PNC Bank under the Advisory Agreement. The
Fund pays BIMC an investment advisory fee for advisory, accounting and
administrative services of BIMC and BFM.

The Advisory Agreement provides for a fee at the annual rate of 4/10ths of
1% of the first $100,000,000 of the Fund's average daily net assets plus
3/10ths of 1% of net assets exceeding $100,000,000.

PFPC Inc., an affiliate of PNC Bank, serves as the Fund's transfer and
dividend disbursing agent. As compensation for these services, PFPC Inc. is
entitled to a fee equal to $12,500 per year plus related out-of-pocket
expense.

PFPC Trust Company, a subsidiary of PFPC Inc, serves as the Fund's
custodian. As compensation for its services as custodian, PFPC Trust
Company is entitled to a fee computed at an annual rate of .0065% of the
Fund's average gross assets plus additional fees based on the number and
type of transactions.

The managing general partners each receive a fixed fee as compensation for
their services. In addition, the President, Treasurer and Chief Compliance
Officer receives additional payments for overseeing the Fund's activities
including compliance with federal securities laws, plus reimbursements of
related expenses. Total payments to or for the managing general partners
amounted to $96,071.

Legal fees amounting to $62,000 were paid to Drinker, Biddle & Reath LLP.
Michael P. Malloy, Esq., Secretary of the Fund, is a partner of that firm.

(D) INVESTMENT TRANSACTIONS

Purchases and sales of investment securities (excluding short-term
obligations) were $5,572,096 and $2,218,081, respectively, for the year
ended December 31, 2005.

(E) NET ASSETS

At December 31, 2005, net assets consisted of:

<Table>

Undistributed net investment income......................... $ 7,837
Accumulated net realized losses on securities............... (5,286,081)
Net unrealized appreciation of investments (book basis)..... 230,165,274
Other capital -- paid-in or reinvested...................... 46,502,737
------------
$271,389,767
============
</Table>

(F) DISTRIBUTIONS TO SHAREHOLDERS

Net investment income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from
accounting principles generally accepted in the United States of America.
The primary difference applicable to the Fund's distributions is the
requirement to pass through 40% of its aggregate expenses to the partners
of the Fund. This is required because the Fund has fewer than 500 partners
and does not continuously offer shares. The partners treat this
pass-through of expenses as a distribution of net investment income and a
corresponding miscellaneous itemized deduction of investment expense.

The tax character of distributions paid during 2005 and 2004 was as
follows:

<Table>
<Caption>
2005 2004
---------- ----------

Ordinary income............................................. $5,548,000 $5,595,098
Investment expense.......................................... (478,141) (492,029)
---------- ----------
$5,069,859 $5,103,069
========== ==========
</Table>

(G) IN-KIND DISTRIBUTION OF SECURITIES

During the year ended December 31, 2005, the Fund distributed portfolio
securities in lieu of cash for most shareholder redemptions. The value of
these redemptions was as follows:

<Table>
<Caption>
NET REALIZED FUND
VALUE OF THE GAIN INCLUDED SHARES
REDEMPTIONS IN REDEMPTIONS REDEEMED
------------ -------------- --------

$30,362,258 $28,437,435 91,687
</Table>

Net realized gains from these transactions are not taxable to the Fund.
Such gains are not distributed to shareholders and will be reclassified to
paid-in capital at the Fund's fiscal year end. These transactions were
completed following guidelines approved by the Managing General Partners.

(H) INDEMNIFICATIONS

In the ordinary course of business, the Fund enters into contracts that
contain a variety of indemnifications. The Fund's maximum exposure under
these arrangements is immaterial. The Fund has not had prior claims or
losses pursuant to the contracts and expects the risk of loss to be remote.

(I) TAX MATTERS

At December 31, 2005, the components of distributable earnings on a tax
basis were as follows:

<Table>

Undistributed ordinary income (before tax allocation
described above).......................................... $ 7,837
Capital loss carryover...................................... (5,286,081)
Net unrealized appreciation of investments.................. 234,856,031
------------
$229,577,787
============
</Table>

The cost of investments for federal income tax purposes at December 31,
2005 was $38,143,731. The unrealized appreciation (an excess of value over
cost) was $234,856,031. The difference between book basis and tax basis of
investments is attributable to the use of the individual partners' tax
basis for those securities contributed to the Fund at its inception, as
required by law.

On December 31, 2005 undistributed net realized gains on securities was
decreased by $28,437,435 and additional paid in capital was increased by
$28,437,435 due to permanent differing book and tax treatment of realized
gains and losses. Net assets of the Fund were unaffected by this change.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of
Chestnut Street Exchange Fund
Wilmington, Delaware

We have audited the accompanying statement of net assets of Chestnut Street
Exchange Fund (the "FUND"), as of December 31, 2005, and the related statement
of operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended and the financial highlights
for the each of the three years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights for each of the two years in the period ended December 31, 2002 were
audited by other auditors whose report dated February 14, 2003 expressed an
unqualified opinion on those financial highlights.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 2005 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Chestnut Street Exchange Fund as of December 31, 2005, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the three years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.

Briggs, Bunting & Dougherty, LLP

Philadelphia, Pennsylvania
January 19, 2006

ADDITIONAL INFORMATION (UNAUDITED)

FORM N-PX

A description of the Fund's Proxy Voting Policies and Procedures as well as
information regarding the voting of proxies relating to portfolio securities for
the most recent 12-month period ended June 30, 2005, are available upon request
and without charge by calling (800) 852-4750 or by visiting the Securities and
Exchange Commission's ("SEC" 's) website at http://www.sec.gov.

FORM N-Q

The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available on the SEC's website at http://www.sec.gov. The Fund's Forms N-Q
may be reviewed and copied at the SEC's Public Reference Room in Washington,
D.C. Information about the Public Reference Room may be obtained by calling
(800) SEC-0330.

TAX INFORMATION

All of the dividends paid by the Fund in 2005 are "qualified dividends" for
taxation at rates lower than those applicable to ordinary income.

INFORMATION ON THE MANAGING GENERAL
PARTNERS AND OFFICERS OF THE FUND

The list below provides certain information about the identity and business
experience of the Managing General Partners and officers of the Fund. The Fund's
Statement of Additional information includes additional information about the
Fund's Managing General Partners, which may be obtained from the Fund free of
charge by calling 1-800-852-4750.

TERM OF OFFICE: The Fund's partnership agreement provides that each Managing
General Partner holds officer until the earliest of (a) the election of his
successor; or (b) the date a Managing General Partner dies, resigns, becomes
insane, is adjudicated a bankrupt or is removed by a majority of the partners.
The officers of the Fund are elected by the Managing General Partners and each
officer holds office for one year or until he or she shall resign or be removed
or until his or her successor is elected and qualified.

<Table>
<Caption>
NUMBER OF
PORTFOLIOS
POSITION IN FUND OTHER(2)
WITH THE PRINCIPAL COMPLEX(1) DIRECTORSHIPS
FUND AND OCCUPATIONS DURING OVERSEEN BY HELD BY
LENGTH OF PAST 5 YEARS AND MANAGING MANAGING
NAME, ADDRESS AND AGE TIME SERVED CURRENT AFFILIATIONS GENERAL PARTNERS GENERAL PARTNER
- --------------------- --------------- --------------------------------- ---------------- ---------------

INTERESTED MANAGING GENERAL
PARTNERS
Richard C. Caldwell* Managing Advisory Director, PNC Florida, 1 None
620 Indian Harbor Road General Partner FSB; Advisory Director in
Vero Beach, FL 32963 since 1997 Philadelphia and Southern New
Age: 61 Jersey region for PNC Bank;
Consultant for PNC Florida;
Chairman, Florida Advisory
Council; formerly, President and
Chief Executive Officer, PNC Bank
FSB from May 1998 until July
1999; Director, JLC, Inc. since
February 1996 (investment holding
company); Director, DR Inc. since
April 1994 (investment holding
company).
Edward J. Roach* Managing Certified Public Accountant; Vice 1 None
400 Bellevue Parkway General Partner Chairman of the Board, Fox Chase
Wilmington, DE 19809 since 2000, Cancer Center; President and
Age: 81 Chief Treasurer of 1 other investment
Compliance company advised by BIMC;
Officer since Director, The Bradford Funds,
2004, President Inc. until 2000.
since 2002,
Treasurer since
1981
</Table>

DISINTERESTED MANAGING
GENERAL PARTNERS
Robert R. Fortune Managing Financial Consultant; Member of 1 None
2920 Ritter Lane General Partner the Financial Executives
Allentown, PA 18104 since 1976, Institute and American Institute
Age: 89 Chairman since of Certified Pubic Accountants.
1994
Langhorne B. Smith Managing Retired. President and Director, 1 None
7036 Goshen Road General Partner The Sandridge Corporation
Newtown Square, PA 19073 since 1997 (private investment company);
Age: 69 Director, Claneil Enterprises,
Inc. (private investment company)
David R. Wilmerding, Jr. Managing Chairman, Wilmerding & Associates 54 None
One Tower Bridge General Partner (investment advisers) since
100 Front Street since 1976 February 1989; Director, Beaver
Suite 1430 Management Corporation; Director,
West Conshohocken, PA 19428 Mutual Fire Marine & Inland
Age: 70 Insurance Co., Inc; Director,
People First, Inc. (unitary
savings and loan holding
company).
OFFICER
Michael P. Malloy Secretary since Secretary of the Chestnut Street N/A N/A
Drinker Biddle & Reath 2001 Exchange Fund; Partner in the law
One Logan Square firm of Drinker Biddle & Reath
Philadelphia, PA 19103 LLP.
Age: 46
</Table>

* Messrs. Caldwell and Roach are "interested persons" of the Fund as that
term is defined in the Investment Company Act of 1940 ("1940 Act"). Mr.
Caldwell owns stock of an affiliate of the adviser and Mr. Roach is an
employee of the Fund.

(1) A Fund Complex means two or more investment companies that hold themselves
out to investors as related companies for purposes of investment and
investor services, or have a common investment adviser or have an
investment adviser that is an affiliated person of the investment adviser
of any of the other investment companies. David R. Wilmerding, Jr. also
serves as a Trustee to the BlackRock Funds.

(2) Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended
(i.e., "public companies") or other investment companies registered under
the 1940 Act.

- ---------------------------------------------------
- ---------------------------------------------------
MANAGING GENERAL PARTNERS

Richard C. Caldwell
Robert R. Fortune
Edward J. Roach
Langhorne B. Smith
David R. Wilmerding, Jr.

INVESTMENT ADVISERS

BlackRock Financial Management, Inc.
and
BlackRock Institutional
Management Corporation
100 Bellevue Parkway
Wilmington, Delaware 19809

TRANSFER AGENT

PFPC Inc.
P.O. Box 8950
Wilmington, Delaware 19899
(800) 852-4750
- ---------------------------------------------------
- ---------------------------------------------------
- ---------------------------------------------------
- ---------------------------------------------------

[CHESTNUT STREET EXCHANGE FUND LOGO]

ANNUAL REPORT
DECEMBER 31, 2005

CHESTNUT STREET EXCHANGE
FUND

400 Bellevue Parkway
Wilmington, Delaware 19809
(302) 792-2555
Edward J. Roach, President & Treasurer
- ---------------------------------------------------
- ---------------------------------------------------

ITEM 2. CODE OF ETHICS.

(a) The registrant, as of the end of the period covered by this report,
has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party.

(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics description.

(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, that relates to one or
more of the items set forth in paragraph (b) of this item's
instructions.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The registrant's board of managing general partners has determined that the
registrant has at least one "audit committee financial expert" (as defined in
Item 3 of Form N-CSR) serving on its audit committee. Langhorne B. Smith is the
"audit committee financial expert" and is "independent" (as each item is defined
in Item 3 of Form N-CSR).

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$21,000 for 2005 and $20,400 for 2004.

Audit-Related Fees

(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the

registrant's financial statements and are not reported under paragraph
(a) of this Item are $0 for 2005 and $0 for 2004.

Tax Fees

(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $0 for 2005 and $0 for
2004.

All Other Fees

(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are
$0 for 2005 and $0 for 2004.

(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.

The Audit Committee does not have pre-approved policies and
procedures. Instead, the Audit Committee approves on a case-by-case
basis each audit or non-audit service before the accountant is engaged
by the Registrant.

(e)(2) The percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are
as follows:

(b) 0%

(d) 0%

(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was 0%.

(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen
by another investment adviser), and any entity controlling, controlled
by, or under common control with the adviser that provides ongoing
services to the registrant for each of the last two fiscal years of
the registrant was $0 for 2005 and $0 for 2004.

(h) Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).

(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.

ITEM 12. EXHIBITS.

(a)(1) Code of ethics that is the subject of disclosure required by Item 2
is incorporated by reference to the N-CSR filed on March 9, 2005 (SEC
Accession No. 0000893220-05-000491).

(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

(a)(3) Not applicable.

(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

(registrant) Chestnut Street Exchange Fund

By (Signature and Title)* /s/ Edward J. Roach
--------------------------------------
Edward J. Roach, President & Treasurer
(principal executive officer &
principal financial officer)

Date February 22, 2006
---------------------

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By (Signature and Title)* /s/ Edward J. Roach
--------------------------------------
Edward J. Roach, President & Treasurer
(principal executive officer &
principal financial officer)

Date February 22, 2006
---------------------

* Print the name and title of each signing officer under his or her
signature.